No one is ever prepared for hardship. In today’s unprecedented times, most banks and lenders want to work with you when faced with financial difficulties. If you are behind on your mortgage payment you have options that allow you to keep your home or sell your home at fair market value.
Keeping Your Home
If you qualify and want to keep your home, the following options are available:
This is one of the most common and simplest options. Your lender/servicer may agree to allow you to make regular monthly mortgage payments while deferring your unpaid balance. Repayment plans are at the discretion of the lender and may include an increased monthly payment or complete deferment. This helps you catch up on your mortgage without extra hardship. The amount of this payment will vary based upon the delinquent balance and ability to satisfy the amount past due. A repayment plan may be a good choice if you were unemployed for a short period of time or had a life event that had a severe financial impact
This is when your lender agrees to change the original terms of the loan. You may be able to change the interest rate, the payment amount, and other factors. This option works when changes in the loan terms can reduce the monthly payment amount.
This option defers and/or pauses your monthly payments for a designated period of time. At the end of the agreed time, you must pay your debt. This can be a lump sum payment or a repayment plan. Forbearance is a good option if you will be able to immediately resume making payments and will have income to support repayment.
Refinancing allows you to lower your mortgage payment by initiating a new loan. Loans may have lower or higher interest rates and additional costs, such as traditional closing fees. You must qualify for the requested loan so this often is not an available option for homeowners in default.
If you to want to sell or if you don’t qualify to keep your home
If it is in your best interest to sell your home, consider one of these options:
If you have equity in the house to cover the balance owed and selling costs, selling the property may be a good option. If you want to sell your home, our team can customize a plan to maximize the presentation of your home and generate the best returns possible.
A short sale is when the bank approves the sale of your home to be sold for less than the current balance. The lender must agree to accept the profits of the sale as final payment of your debt. Short sales have specific requirements and conditions of the sale such as denial of an “Arms Length” , which simply means that you are not allowed to sell the property to a family member. You may be asked to make payments while the house is for sale. You can learn more about short sales under the Short Sale tab on this page.
Deed in Lieu is commonly referred to as a voluntary agreement where the Owner surrenders title back to the lender. Banks/Lenders may consider a Deed-in-Lieu when all other options have failed.
*Before choosing which solution is best for you, we suggest that you speak with an attorney and/or a financial specialist to understand the tax implication and bearing this may have on your credit*
AVOID FORECLOSURE SCAMS! If you have any questions or suspicions about offers you receive, call a HUD housing counselor (800-569-4287)